The Industrial and Commercial Bank of China (ICBC) and Hong Kong-based Bank of East Asia had reached and signed an agreement in which ICBC would pay 140.23 million U.S. dollars to buy 80 percent interest of Bank of East Asia USA, the Hong Kong bank said late Sunday in a statement.

Bank of East Asia will retain the remaining 20 percent stake in Bank of East Asia USA, and the two banks signed the agreement in Chicago on Jan. 21, according to the statement.

Upon completion of the transaction, Bank of East Asia will have the put option to sell its remaining shares to ICBC in accordance with the terms and timeline specified in the agreement, it said.

Both ICBC and Bank of East Asia are seeking the necessary regulatory approval in the U.S. and China. Once the deal was completed, ICBC would be responsible for the operation and management of Bank of East Asia USA.

The transaction will create a win-win situation for both parties, said ICBC Chairman Jiang Jianqing.

The acquisition would enable ICBC to establish a solid presence in the U.S. With a commercial bank license in the U.S., ICBC can further expand its retail banking business and operating network across the nation, and ultimately enhance its market position, he said.

"This unprecedented acquisition of a controlling stake in a U.S. commercial bank by a mainland bank is strategically significant," said Jiang.

The successful completion of this transaction will not only establish a good foundation for the provision of holistic financial services by a Chinese mainland bank in the U.S., but also will mark a new era of open-market co-operation between China and the U.S., and have a positive impact on Sino-U.S. trade relations, Jiang added.

Bank of East Asia Chairman and Chief Executive David Li said the transaction will further optimize the allocation of the bank's resources and strengthen financial services in the major markets where Bank of East Asia operates.

"Bank of East Asia and ICBC share a strong business relationship, and together we will continue to develop our strategic partnership for the benefit of our customers around the world," he said.

Li said Bank of East Asia would fully support and co-operate with ICBC in obtaining regulatory approval in the U.S., and will ensure the smooth transition of Bank of East Asia USA to ICBC.

Successful completion of the transaction is subject to approval from China Banking Regulatory Commission, the Hong Kong Monetary Authority, and U.S. Federal Reserve Board, according to the statement.

Headquartered in New York, Bank of East Asia USA operates 13 branches in New York and California. It holds a commercial bank license in the U.S. and offers services including retail banking, commercial banking, and trade finance, it said.

Bank of East Asia, set up in Hong Kong in 1918, is the largest independent local bank in Hong Kong.

In 2009, Bank of East Asia sold 70 percent stake of the Bank of East Asia (Canada) to ICBC for just over 80 million U.S. dollars.